Section 86(1)(f) of the Electricity Act, 2013 (“Electricity Act”) empowers the State Electricity Regulatory Commission to adjudicate disputes between licensees and generating companies, and to refer any dispute for arbitration.  Section 86. Functions of State Commission. -(1) The State Commission shall discharge the following functions, namely: —
(a) determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State:
Provided that where open access has been permitted to a category of consumers under section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers;
(f) adjudicate upon the disputes between the licensees, and generating companies and to refer any dispute for arbitration; Show More
When disputes arose between the parties, the Rajasthan Electricity Regulatory Commission appointed an Arbitrator under Section 86(1)(f) read with Section 158 of the Electricity Act.
An award was made. It was challenged in a Section 34 petition under the Arbitration and Conciliation Act, 1996, (“ACA”), which was rejected.
In appeal the High Court: –
The Supreme Court affirmed the High Court’s decision and held the award was non est in law because the arbitrator could not have been appointed: –  However, the court said the observations on merit will not stand in way if any other remedy is availed. Show More